Only Two Numbers Matter

This is Howard Morgan, managing partner at First Round Capital, serial entrepreneur, and former professor at Wharton. He says:

If you have a business that’s based around the internet, there are basically only two numbers you need to know: what’s the cost to acquire a customer, and what’s the lifetime customer value. If the lifetime value is higher than the cost to acquire a customer, then you have a business. If it isn’t, then you don’t.

Here’s the quick video, from gust.com, one of a rich collection of short videos from angel investors. It’s a great resource:

If for any reason you don’t see that video embedded here, you can click here for the link to the original.